What’s Next for AI? Andreessen Horowitz Founders Share Their Thoughts

Stocks of companies tied to artificial intelligence have been hitting stratospheric levels for over a year now, thrilling investors, but also causing concerns about a potential AI bubble. As startups close breathtaking funding rounds, like the $40 billion OpenAI collected in March of this year, fears of an AI bubble are growing — and some say a burst could be even bigger than the dot-com bubble of the late 1990s. The bubble theory is hotly debated. Some within the industry say they agree that the investment landscape is bloated, including OpenAI co-founded Sam Altman. Other experts, like Goldman Sachs, however, say we’re not in one (yet) — and Fed chair Jerome Powell has been skeptical of the bubble calls. As that debate rages, investors continue to fund AI startups. Few investors are in as deep as Marc Andreessen and Ben Horowitz. Their venture firm, Andreessen Horowitz (commonly called a16z), has sunk billions into the AI space. In April, it was reported the company was in early talks to raise a massive $20 billion AI-focused fund. The two investors recently came together at a16z’s Runtime conferences to talk about where AI can go beyond chatbots. Neither was willing to make any specific predictions about AI’s forthcoming capabilities, saying it’s too early to even imagine that. Andreessen likened AI to the personal computer in 1975, noting there was no way at that time to imagine what PCs would be capable of today. However, he expects similar levels of advancement — from a stronger starting point. AI, he said, is already approaching levels of human creativity — and while Andreessen would love to see humans continue to have superiority in that area, he thinks it’s unlikely. Tools like OpenAI’s Sora 2 video, for instance, are already capable of creating realistic scenes, animations, and special effects — and the introduction of AI actress Tilly Norwood has caused an outcry and prompted debate in Hollywood. “I wanna like hold out hope that there is still something special about human creativity,” he said. “And I certainly believe that, and I very much want to believe that. But, I don’t know. When I use these things, I’m like, wow, they seem to be awfully smart and awfully creative. So I’m pretty convinced that they’re gonna clear the bar.” Horowitz agreed, saying that while AI might not currently create at the same level as human artists, whether painters or hip-hop performers, that’s largely due to how little it has learned so far. It’s just a matter of time before it has an equal or superior level of talent. And some artists are already looking to use AI to collaborate, he said. “With the current state of the technology, kind of the pre-training doesn’t have quite the right data to get to what you really wanna see, but, you know, it’s pretty good,” he said. “Hip-hop guys are interested because it’s almost like a replay of what they did — they took other music and built new music out of it. AI is a fantastic creative tool. It way opens up the palette.” While AI can devour as many data sets as programmers throw at it, that doesn’t give the technology situational awareness. It is, in essence, book smarts versus street smarts. But the robotics field is expanding quickly. Elon Musk and Tesla are working on humanoid robots and Robotics company 1X has already started to take preorders for a $20,000 humanoid robot that will ‘live’ and work around your home. Once that technology and AI are blended, Andreessen said, AI will see a significant jump in actionable intelligence. “When we put AI in physical objects that move around the world, you’re gonna be able to get closer to having that integrated intellectual, physical experience,” he said. “Robots that are gonna be able to gather a lot more real-world data. And so, maybe you can start to actually think about synthesizing a more advanced model of cognition.” While there are plenty of experts who warn the AI market could be in a bubble right now, including OpenAI CEO and co-founder Sam Altman, Horowitz dismisses the idea, saying bubbles occur when supply outstrips demand — and that’s not the case with AI. “We don’t have a demand problem right now,” he said. “The idea that we’re going to have a demand problem five years from now, to me, seems quite absurd. Could there be weird bottlenecks that appear, like we don’t have enough cooling or something like that? Maybe. But, right now, if you look at demand and supply and what’s going on and multiples against growth, it doesn’t look like a bubble at all to me.” BY CHRIS MORRIS @MORRISATLARGE